Wage hike in plantations impacts on Richard Pieris’ bottomline
View(s):The Richard Pieris Group ended its performance in financial year 2013/14 reporting a Group Revenue of Rs.34.7 billion with a Profit before Tax of Rs.2.3 billion.
The reported Profit for the year does not include any gains of a capital nature, the release stated. No details on post-tax profit or comparative figures for the previous year were given.
After a very successful seasonal campaign the retail sector had a relatively quiet quarter but its marketing activities gained momentum towards the latter half of the period.
The Plastics and Distribution Sector faced a range of challenges during the quarter ended 31st March 2014, which included unfavourable market conditions, low purchasing power of consumer due to adverse economic conditions, it was noted.
The sector’s products do not constitute a purchase priority in daily life and this proved to be a drawback in the phase of the sluggish economy and the reduced spending power of consumers.
However, each of the Sector’s SBU’s continued to search for market opportunities, while focusing on reducing overheads to enhance their competitiveness, profitability, and focused on minimum work-in-capital investments to optimise costs, the release stated.
The wage increase in the plantation sector employees had its impact on the reported results of the period under review, it was noted.
Rubber prices were yet again down when compared to last year and had an adverse impact on the reported results. There was an increase in the coconut production due to favourable weather conditions with favourable prices. The total production of oil palm also increased when compared to the corresponding period of the previous year and the oil palm prices continued to increase. However, there was a decline in the production of tea when compared to last year though the prices improved, it was stated.
In a challenging financial year the tyre sector performed exceptionally well and benefited from the low raw material prices. It further expanded its product portfolio with the introduction of a new mini truck tyre “Hida” which was introduced to the market at a very competitive price, the company stated.
Planned expansions in its Retail operations will continue and a large format retail outlet was opened in the city of Panadura last month. A spokesman for the Company stated that the Group is already considering many expansion opportunities and new activities taking into account the strengths of the Group in the different sectors for its long term growth, the release added.